Amazon and Alphabet's nuclear-power deals... Brett Eversole on 'Phase 2' of the AI boom... Diesel problems... America's oil reserves fall to a 44-year low... S&P 500 hits a record... Earnings season is coming... Bullish signs...
The energy grab continues...
Last week, while we were in Las Vegas, there was some big news back home...
Amazon (AMZN) announced a 20-year, $3 billion power-purchase deal with Constellation Energy (CEG) that will also expand and improve Maryland's only nuclear power plant.
The Calvert Cliffs plant is about 75 miles down the western shore of the Chesapeake Bay from our headquarters in Baltimore. It's a similar distance from Northern Virginia's "Data Center Alley."
Today, Alphabet (GOOGL) announced a similar $4.3 billion agreement with Constellation, also for 20 years, to upgrade and add capacity at six existing nuclear plants in Illinois, New Jersey, and Pennsylvania.
It's not a coincidence... The AI power players are facing a rising public backlash. They're looking for any and all ways to keep a generational infrastructure build-out going... And politicians are increasingly hearing from voters about their concerns about data centers and rising energy costs.
Here in Maryland, for example, Gov. Wes Moore has pivoted hard from wanting to "supercharge" data centers to proposing more safeguards against them.
This sort of political dance is playing out in states all over the country.
If there's support for data centers at all, it's usually with a caveat that the big tech firms "pay their own way." These Amazon and Alphabet deals deliver some of that.
As part of the Amazon-Constellation deal, new energy from the Maryland nuclear plant would serve the PJM regional grid, which covers 13 states and has become increasingly strained (and expensive).
The planned addition of 190 megawatts at the facility, running around the clock, would cover the energy needs of about 150,000 homes or a couple data centers. That's a significant load but also only 10% of the plant's current capacity.
Alphabet's deal will add 890 megawatts of capacity between six power plants, part of the company's larger 3,590-megawatt contract with Constellation.
Added capacity won't arrive overnight...
At Calvert Cliffs, Amazon and Constellation will fund upgrades that aren't expected to come online until 2030 at the earliest. It's a similar story with the Google deal... Modernizing turbines, steam generators, and digital control systems will happen by 2028 at the earliest.
Until then... AI's power suck could also keep folks' energy bills heading higher. But as we've written in our past few editions, so long as AI spending from the big players also rises, the market boom can keep going, too...
That's what Stansberry Research senior analyst Brett Eversole is looking to tell as many people as possible right now. He says "Phase 2" of the AI boom is only beginning, and a major catalyst next month could send shares of some AI-related stocks soaring.
Click here to watch Brett's free presentation right now with all the details before it goes offline. Just for tuning in, you'll hear one stock he says to buy today and another to avoid at all costs as the AI boom gets ready for its next phase.
Today, we already saw the tailwind at work. On the heels of these "hyperscalers" promising to fund more energy capacity, Constellation's stock was up 12% today and among the biggest gainers in the S&P 500 Index. Many more AI-infrastructure names were, too.
Meanwhile...
The government's (small) answer to skyrocketing diesel prices...
America still runs on other energy, too, like diesel... And diesel has its own troubles right now.
Last night, President Donald Trump signed an executive order targeting the spike in diesel prices that we've seen since the start of the war in Iran in late February.
According to AAA, diesel fuel across the U.S. now averages $6.32 per gallon and hit an all-time high of $6.53 per gallon last month. And at some California stations, diesel prices topped $10... too many digits for pumps to show the right price.
As we've reported here, the White House once considered banning diesel exports to combat the higher prices. But as we wrote in the September 28 Digest...
Banning diesel exports won't bring prices down. In fact, it could have the opposite effect... When the diesel ban first started gaining traction, Energy Secretary Chris Wright said that "the blunt tool of banning diesel exports definitely doesn't work."
So, upon last night's announcement, the government (for now) is taking a different, more minor approach.
Under the executive order, farmers and truckers can temporarily use "dyed" fuel without paying taxes or penalties.
Dyed fuel is diesel tinted red to mark it as exempt from the $0.24-per-gallon federal diesel tax. This fuel is normally reserved for farm equipment and other off-road use. Using it on public roads is typically illegal and carries steep penalties.
Even with that tax relief, the average diesel price would be more than $6 per gallon, based on the AAA data. So, diesel fuel prices would still be up about 65% from the same time last year.
Also, allowing truckers to use this fuel doesn't create more of it. So any truckers using dyed fuel would be taking supply away from farm, construction, and other uses, which could cause localized price jumps.
The White House called this one of the "historic efforts to ensure fuel affordability" that the government has taken. We're skeptical that it's going to make a big difference.
Meanwhile, oil reserves keep falling...
The U.S. released another 785,000 barrels of crude from the Strategic Petroleum Reserve ("SPR") in the week ending September 25, according to the Energy Information Administration. That's the most recent data available, and it brings the SPR below 284 million barrels – the lowest level since October 1982.
Since the U.S. began releasing oil from the SPR in March, more than 131 million barrels have left our emergency reserves. The Trump administration planned to release 172 million barrels to combat rising energy prices from the Iran war, so another 40 million barrels of that discharge remain.
And just last week, the Department of Energy started the process to release the remaining barrels that it had pledged.
But this is a short-term fix for the energy market...
Speaking at an energy conference in England, Saudi Aramco CEO Amin Nasser said that the global economy has lost about 3 billion barrels of oil since the start of the Iran war.
Emergency releases have lessened that impact... He added that about 1 billion barrels of energy products have been released from corporate and government emergency reserves over the same period.
And, as we've written, those reserves have to be refilled at some point. Nasser estimates that this process could take two years, since purchases for emergency reserves will also have to compete with everyday global oil demand.
That'll only mean more demand for crude over the next two years, which won't encourage lower prices. Instead, if governments are buyers of crude in the years ahead, it could help put a "floor" under prices.
That might not ease anyone's budget, but it could be good for energy companies that help produce and move crude. The same goes for those delivering power to keep the AI boom moving full steam ahead.
A lot of stocks had a good day...
AI stocks were all over the leaderboard today, and utilities were up the most (3%) of any S&P 500 sector. Perhaps even more important, market breadth – the number of stocks going up versus down – was healthy for a second straight day.
The benchmark S&P 500 was up 0.6% to a new record, joining the tech-heavy Nasdaq Composite Index at all-time highs. And more than 350 of the S&P 500 stocks were higher, along with almost half of the small-cap Russell 2000 Index.
As I mentioned yesterday, few investors still expect the Federal Reserve to raise interest rates this month. That's helping lift stocks.
So is the fact that oil futures have also cooled (for now) as Strait of Hormuz shipping traffic has picked up.
Now, that's partly thanks to U.S. military protection from Iranian attacks, which can't go on indefinitely (without a cost). But in any case, Wall Street analysts are in an optimistic mood.
Corporate chief financial officers are, too...
Another earnings season is about to get going...
According to a preview from research firm FactSet, Wall Street analysts and the 100-plus companies that have reported guidance so far have been "more optimistic than normal in their earnings outlooks for the third quarter."
Estimated earnings for the S&P 500 for the third quarter are higher today than they were three months ago at the start of the quarter. And both analysts and companies expect year-over-year earnings growth of nearly 30%.
As you might expect, AI is the dominant theme. FactSet predicts that five of the 11 major S&P 500 sectors will report double-digit growth, including four connected to the AI boom: energy, information technology, communication services, and materials.
But the strong performance isn't expected to be limited to just those areas. Rather, all 11 major sectors of the S&P 500 are projected to grow from this time last year.
That's not bearish.
New 52-week highs (as of 10/5/26): Alpha Architect 1-3 Month Box Fund (BOXX), iMGP DBi Managed Futures Strategy Fund (DBMF), iShares MSCI Japan Index Fund (EWJ), Forum Energy Technologies (FET), Franklin FTSE Japan Fund (FLJP), GitLab (GTLB), Illumina (ILMN), Lumentum (LITE), Marathon Petroleum (MPC), Cloudflare (NET), Nvidia (NVDA), Okta (OKTA), Palo Alto Networks (PANW), Qualys (QLYS), Invesco S&P 500 Equal Weight Technology Fund (RSPT), Taiwan Semiconductor Manufacturing (TSM), Twist Bioscience (TWST), Invesco DB U.S. Dollar Index Bullish Fund (UUP), and Valero Energy (VLO).
We've got a bunch of mail today... stemming from yesterday's issue about the U.S. debt... and more thoughts on the rise in gas prices... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.
"Hi, I am a bit surprised that you guys in the investment community never talk about raising either sales taxes or income taxes to resolve the U.S. debt problems. The country has enough wealth to support that without dragging it into recession if it is properly done. Cutting government expenses or more spending discipline can do a small part of reducing the deficit but one day the U.S. will need to face reality and do the [obvious]." – Subscriber Serge F.
"Corey includes a question from Stuart S, who says the country is heading in the wrong direction with Republicans in charge. Which party created the massive welfare state, adheres to modern monetary theory, opened our borders and encouraged mass migration with promises of free food, money and housing? Which party files lawsuits every time Trump tries to cut the budget?
"I agree that we need to drastically reduce government spending and return to sound money and my conservative friends agree. Do any liberals?" – Subscriber Debbie J.
"Thanks Corey, it's always nice to see that you actually read our e-mails. I must admit, I was a little jazzed to see my name on today's Digest. I have a bad feeling we are going back to the late 70s with hyperinflation and $150-$200 a barrel oil. Time will tell..." – Subscriber Stuart S.
"Recent letter writer Robert says concerns on gasoline prices is overblown. If anything, it is under blown. Look around the world. Europe, Japan and east Asia and most every other place on earth is in dire straits. Economies will come to a grinding halt. It will take at least two years after the Middle East war ends before the oil fields, pipelines and infrastructure are repaired." – Subscriber Mark M.
All the best,
Corey McLaughlin and Nick Koziol
Baltimore, Maryland
October 6, 2026
